Canceling Credit Card to Increase Account Age

[scientifics]

My whole credit history is credit cards, I never carry a balance and I have no late payments or baddies. I have one old card (~4 years), two ~1 year, and 2 new cards.  If I cancel one of my ~1 year old cards will that increase my average account age and increase my score? Is it worth it?

[Anonymous]

All of your CC accounts, whether open or closed, will be counted in your AAofA.  Time (and avoiding additional apps) will increase your age .

Here's a helpful read: fused's closing credit cards. 

If you're wanting to increase your score, post some of the specifics (your FICO score and anything you think may be helpful) and you'll get lots of helpful feedback here.  Even though closing a card will likely not increase your FICO score, there are other things that might.

[llecs]

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@scientifics wrote:

My whole credit history is credit cards, I never carry a balance and I have no late payments or baddies. I have one old card (~4 years), two ~1 year, and 2 new cards.  If I cancel one of my ~1 year old cards will that increase my average account age and increase my score? Is it worth it?

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Unfortunately, FICO scores for AAoA all OC accounts whether they are opened or closed, good or bad. So, if you close it, it'll still be scored for another 10 years up to the point it drops off.

IMO, it wouldn't be worth it. Even if FICO didn't include closed CCs, then, IMO, it still wouldn't be worth it. I don't know your exact open dates, but let's say you have a 48 mo CC, a 12 mo., another 12 mo., and 2 new CCs, guessing at 3 mo each. Are these all of your OC accounts reporting?

If so, then your AAoA = (48+12+12+3+3) / 5 / 12(mo) = 1.3 per your AAoA and since AAoA rounds down to the nearest whole number, your AAoA is 1 year.

If you zapped one of the 1-yr old TLs, let's say via closing it and GWing it to get it deleted, then...

Your AAoA = (48+12+3+3) / 4 / 12(mo) = 1.4 and therefore it is still one year for your AAoA. Your AAoA would not improve.

ETA....outfoxed by the blazing fast beamMEup.

[Anonymous]

Ah!  But your response sounds much more intellectual than mine. 

And your math is pretty dang impressive.  I'm still in the middle of my bowl of wheaties in a struggle to shake the brain cells awake.

Hey, I do want to put out there that sites with FAKO scores sometimes cite the AAof Open Accounts - which can be one of the reasons folks get confused on this.

And, honestly, FICO may or may not consider AAof Open Accounts at some point in their complex and sophisticated algorithms.  However, the standard AAofA referred to on these boards and listed on your FICO reports is the AA of all open and closed accounts.  This is what llecs and I are referring to, and the one to really pay attention to. 

[llecs]

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@Anonymous wrote:

Hey, I do want to put out there that sites with FAKO scores sometimes cite the AAof Open Accounts - which can be one of the reasons folks get confused on this.

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e.g. CreditKarma and anything using TransRisk scores (like MPM, freescore, etc.)